Billionaire Warren Buffett's company is making another foray into newspapers, agreeing to buy 63 newspapers from Media General Inc. for $142 million.
Billionaire Warren Buffett’s company is making another foray into newspapers, agreeing to buy 63 newspapers from Media General Inc. for $142 million.
Berkshire Hathaway Inc. is also extending a loan to Media General and taking a 19.9 percent stake in the company, which will still own 18 TV stations. Media General also owns some websites, such as coupon provider DealTaker.com.
Media General on Thursday said the deal includes all of its newspapers except the Tampa Tribune of Florida and smaller newspapers in that market. It’s in talks to sell those newspapers to other buyers.
Berkshire Hathaway is buying the Richmond Times-Dispatch in Virginia, the Winston-Salem Journal in North Carolina and the Morning News of Florence, S.C., among others.
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Berkshire Hathaway has owned the Buffalo News of New York for decades and bought its hometown paper, the Omaha World-Herald, in December. The company is also the largest shareholder of Washington Post Co., with a 23 percent stake.
Buffett has defended newspapers, saying that they will have a decent future if they continue delivering information that can’t be found elsewhere. They also need to stop offering news free online, he has said.
“In towns and cities where there is a strong sense of community, there is no more important institution than the local paper,” Buffett said in a statement Thursday. “The many locales served by the newspapers we are acquiring fall firmly in this mold and we are delighted they have found a permanent home with Berkshire Hathaway.”
That’s a reversal of his opinion in 2009, when he told Berkshire shareholders that most newspapers faced the possibility of unending losses because the industry had lost its essential nature.
“For most newspapers in the United States, we would not buy them at any price,” he said then.
Berkshire is also lending $445 million to Media General, which it will use to pay off debt. In return, Berkshire is getting the 19.9 percent stake in Media General and a seat on the board.
Shares of Media General, which is based in Richmond, Va., jumped $1.06, or 34 percent, to $4.20 in afternoon trading. The stock has ranged from $1.14 to $6.84 over the past year. Berkshire’s Class B shares dropped 33 cents to $80.26.
Berkshire paid $150 million cash and assumed $50 million in debt when it acquired the World-Herald Co. from its employees, retirees and a charitable foundation.